purchase of business/repayment

Forum|Forum|3 years ago
March 9, 2023
1 reply
5 views

I purchased a childcare business in August of 2021. Just the business name and materials inside the business. not the actual building. I pay rent on the building. The rent just transferred into our name instead of the old owners. We purchased the name and materials from them privately for $57,000 with a notarized letter stating the terms. No interest if paid with in 6 years. In 2021 we did not make any payments so it did not affect anything. However this year we made payments. I guess I'm just not sure how I need to go about reporting the payments on my business taxes this year. An help would be greatly appreciated.

AliciaP1

Level 13

The interest portion of the payment would be the only deductible expense from the loan payments, so for 2022, the payments have no effect on your tax returns. If you're asking about the rent payments, those should be reported as an expense to your business as Rental of Real Property.

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